Thai Businesses Call for Central Bank Action to Stabilize Baht
Thai Businesses Seeking Baht Stabilization Measures
In recent developments, businesses in Thailand are encouraging the central bank to implement strategies aimed at stabilizing the baht, which has seen a significant surge in strength. This rise has raised concerns over possible impacts on economic growth in the upcoming quarter, as articulated by a prominent chamber of commerce representative.
Effects on Key Economic Sectors
Phot Aramwattananon, the deputy chairman of the chamber, emphasized the baht's rapid appreciation is influencing crucial sectors such as exports and tourism. Both areas are vital to the Thai economy, which has been navigating through sluggish recovery since the pandemic, lagging behind its regional counterparts.
The impact of a stronger baht has already been felt across industries reliant on export, particularly in the agricultural and food sectors, as stated in a recent chamber report. The group has urged the central bank to ensure the baht's strength aligns with both domestic economic conditions and global market trends.
Current State of the Baht
As of the latest reports, the baht stands at approximately 32.8 to the U.S. dollar, marking its highest value in over 19 months. Since hitting a low of 37.17 in April, the currency has seen a substantial 13% increase against the dollar. This rapid strengthening has raised red flags regarding the future competitiveness of Thai exports.
Central Bank's Response and Growth Forecast
Addressing concerns, Sethaput Suthiwartnarueput, the Governor of the Bank of Thailand (BOT), noted that they are closely monitoring the situation. He stated that while the baht's strength presents challenges, it has not significantly undermined export levels thus far. Nonetheless, the bank is keen to mitigate excessive volatility in the currency value.
Furthermore, the chamber of commerce has revised its economic growth forecast for 2024, increasing it from a previously projected 2.5% to a range between 2.6% and 2.8%. This adjustment is largely attributed to the new government's economic policies aimed at revitalization. Thanavath Phonvichai, president of the Thai Chamber of Commerce University, believes that various stimulus measures could contribute an additional 0.2 to 0.3 percentage points to growth.
Implications for the Future
The growing strength of the baht poses both opportunities and hurdles for Thai businesses. While a stronger currency can reflect economic strength, it also necessitates strategic adjustments by industries dependent on exports. The dialogue between businesses and the central bank highlights the need for collaborative efforts in navigating these economic landscapes.
Frequently Asked Questions
What is prompting Thai businesses to urge the central bank for action?
Thai businesses are concerned about the rapidly strengthening baht and its potential negative effects on exports and tourism, key sectors for the economy.
How has the baht's value changed recently?
The baht has appreciated significantly, reaching around 32.8 to the U.S. dollar, which is its strongest level in over 19 months.
What are the predicted growth rates for Thailand's economy in 2024?
The Thai Chamber of Commerce has adjusted its growth forecast for 2024 to a range of 2.6% to 2.8%, up from a previous estimate of 2.5%.
What steps is the Bank of Thailand taking regarding the baht?
The Bank of Thailand is monitoring the baht's strength and volatility to ensure it does not adversely affect the economy.
How do exports relate to the baht's strength?
A stronger baht can make Thai exports more expensive and less competitive in global markets, impacting overall economic performance.
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